Shetland and Orkney should loosen their ties with Scotland and the UK to run their own affairs, according to Liberal Democrats. Activists at the Scottish Lib Dems' spring conference in Dundee agreed unanimously that the islands should develop their own relationship with central government – regardless of the outcome of the independence referendum next year.

They also agreed that Shetland and Orkney had a separate right to self-determination.

Tavish Scott, Shetland MSP and former leader of the Scottish party, said current "constitutional navel-gazing" offered a fresh opportunity for the Northern Isles. Islanders should also use oil and gas off their coasts for any future negotiations, he said – an argument already deployed by the Scottish government.

"Shetland and Orkney may never have a stronger opportunity to negotiate a future for the islands," he said. "A future that benefits the economy, culture and our identity in the wider world for the advantage of future generations of islanders.

"If we do nothing then the future is clear: schools and local ferries dictated by the central belt and the emasculation of local accountability. This time can be our time, an island time. I'm a Shetland islander first, a Scot second and a Brit third."

At the last Holyrood election, the Scottish Lib Dems only managed to win first-past-the-post constituencies in Shetland and Orkney.

Scott said his argument against centralisation extended across Scottish islands and rural areas. "We don't want more centralising, know it all, top-down nationalism," he said, "This SNP government doesn't care about the outer extremities of the country."

Scott put forward the Isle of Man as an example that the Northern Isles could follow. He said: "The powers of the Tynwald and the powers that the isle has could be copied in Shetland. So would the SNP oppose Shetland becoming a crown dependency?"

Orkney and Shetland became part of Scotland in 1468 as security for the dowry of a Danish princess who married King James III, he told delegates.